Tax cuts and infrastructure spending are the headline items in this year’s Budget, but remember, there is an election just around the corner. The plans within this Budget will only happen if the Coalition is re-elected in the upcoming election.
Small businesses earning less than $50 million a year will benefit from a fall in the tax rate to 25% and they will be able to write off assets up to $30,000. Middle income earners will benefit with a tax cut of $550, with no tax cuts for higher income earners.
If Labor is elected it is promising to save taxpayers $6B every year by ending cash refunds for excess franking credits. It will, instead, invest $2.3B over the next four years to help cancer sufferers. In addition, Labour will limit negative gearing to new properties and half the CGT discount to 25% from 1 January 2020.
Low-to-middle income earners tax offset is matched to the government’s $1080, but Labor will not back the government’s plan to introduce the 30% tax bracket. For business it will be introducing the Australian Investment Guarantee, allowing businesses to immediately deduct 20% of any new eligible asset worth more than $20,000.
For more detail on the Budget, here is a breakdown of the details.
If you want to know what this all means for you, please talk to us, we can help.